Nothing could be more shortsighted than picking your major based on the earnings for it in one year out of time. You might work for 50 years after graduation. How likely is it that the major you pick based on one year’s earnings will still pay relatively well for a half of a century?

The field might not even exist then. Many of the highest paying entry-level jobs today didn’t exist even ten years ago. Things change. Pick something you love and find a way to make money from it. With the rise of the Internet it is easier than ever to become an expert in your field and to make money from it as an entrepreneur.

There are people in every field doing that right now as you are reading this. You just need to plan for college like you would a business and you need to be creative. If you go to college for four years, taking courses with no plan, and then start sending out your resume in the spring of your senior year, then yes, you will struggle. You need to consider each course as an investment in time and money, and try to figure out how it will help you before you sign up for it. (Yes, I know there will be some courses you just have to take. You still want to figure out how to get the most out of them. Maybe it’s the content; maybe it’s the connections with the professor or other students. There will be something.)

If you aren’t sure yet what to major in, take all of your required courses first and see what you like. I was an undecided business major for almost two years. Then I became hooked on Finance and went with it.

In my MBA program I stuck with Finance because it was familiar. In law school I figured I might break from business and finance, but guess what? I found out that it really was what I liked so I took courses in finance, tax, and estate planning. I worked for a couple of years as a lawyer and I hated every second of it.

Fifteen years ago I made a break and started working as a financial planner. The courses that I took in tax and finance didn’t help me much as a lawyer back then, but have come in handy ever since. Now I get paid very well to do a job I love where I get to help people every day. What could be better than that?

Don’t be afraid to take out student loans just because you will have debt. It’s hard to go to college now without loans or semi-affluent parents who are generous. Debt is not evil. It’s very useful sometimes.

Just like your choice of a major, have a plan for how you will pay for college. You can’t just go in and hope for the best. Don’t be afraid to go to community college and state school. Take a little longer if you need to. The average student loan debt is about what a new car costs. Which one will provide you more value in the future? It’s education, by a mile.

©2006-2013 Yardley Wealth Management, LLC. All rights reserved.

One problem with using books for your financial planning and investment needs is that the authors don’t know anything about your situation. So they can’t tailor their advice to your needs, and even if they could, there is too much to put into one book.  The course work to become a CERTIFIED FINANCIAL PLANNER™ professional is thousands of pages long.  A 200 page book isn’t enough.

Financial planning covers many subjects and each one is a distinct field of study.  A book on the subject matter of financial planning can really only provide at best a framework for decision-making.  You need someone who can put it all together for you, objectively, and that is where an independent financial advisor comes in.

Consumers need to be informed about the channels through which they make their financial planning and investment decisions, and the products they use to implement them.  Despite the plague of scandals in the last ten years, most people really don’t have the time or inclination to stay abreast of the securities industry.

You need to open your mind, and question what you have heard.  See if an idea withstands scrutiny before committing your hard earned money to it.  So many things taken for granted by investors are false, misleading, or just plain nonsense.  Much of the conventional wisdom in this field is wrong or contradictory because it is based upon misinformation that is repeated day after day.

Everyone’s situation is different and even if the conventional wisdom makes sense for most people, it may not for you.  You have to look at your individual situation in light of the financial planning landscape and make the best-informed decisions for you and your loved ones.  Your independent financial advisor can look at your situation objectively and help you to determine your best course of action.

Everyone who has subject matter expertise, either through their career or academic training, or even through pursuing a hobby, knows pretty quickly when speaking to someone else about their subject, whether that other person knows what they are talking about. I run into some people who have a good understanding of some of the principles of financial planning and have done a pretty good job of investing on their own.

Unfortunately, some of the people that I have met that do their own financial planning and manage their own investments have scared me with their recklessness, which is probably based on overconfidence in their abilities. Amazingly, the most overconfident people seem to think that they know what to do and that no one else should be investing on their own!

Many of the popular books for consumers tend to oversimplify things and make it seem as if anyone can read a 200 page book and then be completely prepared to handle all of their financial planning and investment needs. In some ways, the books do a service when they tell you to avoid the big Wall Street firms. Unfortunately, the real solution is not to try to handle it on your own, but to find an independent financial adviser who will act in a fiduciary capacity to you.

A problem with using books for subject matter advice for your financial planning and investment needs is that the authors don’t know your situation, and therefore cannot tailor their advice to your needs, and even if they could, there is just too much to put into one book. The course work to become a CERTIFIED FINANCIAL PLANNER™ professional is thousands of pages long. How can you read 200 pages and think you can handle everything on your own?

Financial planning covers many subjects and each one is a pretty distinct field of study. A 200 page book on the subject matter of financial planning can really only provide a framework for decision-making at best. You need someone who can put it all together for you, objectively, and that is where your independent financial planner comes in. Find one at: www.letsmakeaplan.org

These large companies through their armies of sales people and billion dollar advertising budgets dictate the message that consumers hear, and it is not based on sound financial principles, which rarely change, but rather on what is the “hot” or “quick” product or idea in the news, and what the companies think they can sell to their target audiences and the media. The result is that those messages change constantly leaving most consumers terribly confused.

Most books don’t help either. Generally, the popular books about financial planning and investments fall into three main types: some are focused on investing in stocks or mutual funds; some are personal finance books that usually preach the value of saving and budgeting; and some offer some number of tips centered upon a specific subject like mutual funds or estate planning.

These books are all also geared toward people who want to do everything on their own. If you have the confidence, the knowledge, and the ability, that’s great, but not everybody does. I think that most people that think they are qualified are fooling themselves and should make sure that they are looking at the issue objectively.

There is information out there. The problem is finding the time to figure out what is the relevant information for you. Can you figure that out? I’m not so sure most people have the time or the right skills. I think your efforts should be focused on finding the right independent financial planner who can tailor advice for you, and those efforts are more likely to be fruitful.

The law with respect to taxes, retirement plans, and estate planning seems to stay in a perpetual state of flux. In 2001, the government overhauled the U.S. Tax Code. In 2003, they did it again. Both sets of tax laws are loaded with provisions that keep the laws and what you need to know for planning purposes changing.

The financial planning marketplace is very different than it was just a few years ago. In the past ten (15) years the following common investment vehicles either came into being or reached mainstream acceptance: Roth IRAs, Exchange-traded funds, 529 college savings plans, Coverdell Education Savings Accounts (Education IRAs), Series I bonds, Treasury Inflation-Indexed Securities (known more commonly as Treasury Inflation-Protected Securities, or TIPS), separately managed accounts (SMAs), hedge funds and online trading.

All of these offerings have greatly increased the options available for consumers, and freedom of choice is a great thing. Unfortunately, choosing wisely can be difficult, and sometimes having so many options makes it harder for people to figure out what to do.

As a financial planning practitioner it is a constant challenge trying to keep myself and my clients properly informed; and educating the public is no picnic either. Financial planning, for the most part, even with the wide-ranging choices, can still be a pretty simple process if you have someone who is highly qualified and independent helping you with it.

What is your educational background and what experience do you have? Find out what areas of study your planner has pursued; how long the planner has been in practice; and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice.

What are your qualifications? Ask the planner what qualifies him to offer financial planning advice and whether he is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Ask what steps the planner takes to stay current with the financial planning field. If the planner holds a designation or certification, check his background with his professional organizations.

What services do you offer? The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities.

How will I pay for your services and how much do you typically charge? As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. The most common ways are fees based on an hourly rate, a flat rate, and/or on a percentage of your assets and/or net worth. While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed.

Could anyone besides me benefit from your recommendations? Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.

Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? Several government and professional regulatory organizations, such as the SEC, FINRA, your state insurance and securities departments, and professional organizations keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with their disclosure form.

Can I have it in writing? Ask the planner to provide you with a written agreement that details the services that will be provided. Actually read it, don’t just recycle it. Keep this document in your files for future reference.

The difference is that the fee is not paid to the advisor by the maker of the product, as in the case of commission-based sales. When you buy a load mutual fund from an advisor, the mutual fund company pays the commission to the advisor. No matter what the independent fee-only advisor recommends, he will charge you the same fee based upon a percentage of the assets he manages for you, and you will have to pay it.

As an aside, I don’t know how many times I have heard that when you buy a mutual fund from a broker, you don’t really pay a commission; the fund company pays the broker for the sale. That, of course, is ludicrous, and drives me bonkers. If the mutual fund commission is not paid from the customer’s money, where exactly does the mutual fund company get the money to pay it? Are mutual fund companies charities? Of course not, the mutual fund company takes the money for the commission from you, the buyer of the fund, right out of your investments, as an expense of the mutual fund.

In Jason Zweig’s article in the Wall Street Journal this weekend, he talked about investors getting hurt by the fall in Apple’s share price, and how it hurt some bondholders.  The headline grabbed my attention.

These so-called bondholders are people who bought equity-linked structured products from some of the big investment banks.  The investors in these products got better yields than typical bondholders, and if the underlying stock price stays flat or goes up, investors got their money back at maturity.  Seemed like a safe bet with Apple, right?

However, if things went wrong and the company’s share prices go down 20%, the investor winds up getting shares in the company instead of getting their money back.  So the investors bought a safe-sounding product for its higher yield and will now lose a lot of money.

A long time ago I read some great advice in Forbes magazine.  The editor at the time said to buy stocks or bonds, or funds of stocks or bonds, and that’s all.  Anything more complicated than that was made by the intermediary to make money off its customers.  I couln’t agree more.

As a consumer, you have an alternative that you probably do not know anything about. Most people I come across do not know that my profession actually exists. Even my mother-in-law still calls me a broker.

There are Financial Planners and Investment Advisors who work independently of the large financial institutions; meaning they don’t work for Merrill Lynch or Smith Barney or H&R Block, or any of the other large banks or brokerage firms. They work at small firms in your community you may have never heard of.

They don’t sell products or charge commissions. You ask them specific questions about your finances or investments; or you ask them to look over your entire situation; and then you pay them a fee for their advice. That fee for the advice is not tied, in any way, to their recommendations, or to the implementation of their recommendations.

Most independent Financial Planners will work for an hourly rate; a rate for a specific financial planning question or engagement; a yearly retainer fee; a fixed fee; or something else; but not for commissions. These independent Financial Planners have pioneered the art and science of financial planning. Of course, it is a good business, and Financial Planner sounds nicer than broker or registered rep, so the large institutions have been copying from them, calling their sales reps Financial Planners or Financial Advisors, rolling out their own cheap canned financial plans, and shifting toward charging fees instead of commissions.

There are also Investment Advisors to whom you can pay a fee. They generally work under any of the same arrangements as the Financial Planners above, or a fee based upon a percentage of the investment assets they manage for you, which is the most common method in the industry. Most, but not all, Financial Planners are actually Investment Advisors, and vice-versa. A good place to start when looking for an independent financial planner or advisor is www.NAPFA.org

In addition to the fact that most of us have no education or experience in financial matters, other than through trial and error, the next biggest reason people don’t know what to do about their finances, or where to go for advice, is that there are very few knowledgeable, experienced, unbiased, independent voices in this area. Most of the people in the financial services industries are selling products that they want you to buy, from the company that they work for. They work for brokerage firms, banks, and insurance companies; and they are in the business of selling stocks, mutual funds, annuities, and insurance, usually for commissions.

You probably don’t know that it exists, but there is a part of the financial services industry that does not sell products made by their companies, and does not charge commissions. These professionals don’t sell products per se, but independent advice; and I definitely think you need it.

Independent financial planning and investment advice is advice not tied to the purchase or sale of any product by the provider of the advice. It is as easy as it sounds, and unfortunately, it’s pretty rare.

The guy who says his advice is free when you buy his product isn’t giving you a great deal. He’s interested in selling the product because that’s his job, and it’s okay that that’s his job. You might ultimately buy his product if it makes sense for you.

What doesn’t make sense is for you to hire him as your “financial planner” when he can’t really give you any independent advice. He has a pretty big conflict of interests in the advice he gives you regarding the products he sells. It’s just human nature.

You need to initially work with an independent financial planner to see what you need, if anything, and then the salesman can help you choose among products that fit within the financial planner’s recommendations. The two-step process may sound inefficient, but most people I work with have spent thousands of dollars on financial products that they probably didn’t need. As with most things in life, a little time and money spent planning is usually well spent.

It might be hard to find a financial planner who will work with you, not contingent on you buying products from him, but a good place to start is with the National Association of Personal Financial Advisors, which is the largest organization of fee-only financial planners. www.napfa.org.